ClearSign Technologies Corporation

Good day and welcome to the ClearSign Technologies fourth quarter and full year 2021 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Matthew Selinger of Firm IR Group. Please go ahead, sir.

Good afternoon and thank you, operator. Welcome, everyone, to the ClearSight Technologies Corporation fourth quarter and full year 2021 results conference call. During this conference call, the company will make forward-looking statements. Any statement that is not a statement of historical fact is a forward-looking statement. This includes remarks about the company's projections, expectations, plans, beliefs, and prospects. These statements are based on judgments and analysis as of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The risks and uncertainties associated with the forward-looking statements made in this conference call include, but are not limited to, whether field testing and sales of ClearSign's products will be successfully completed, whether ClearSign will be successful in expanding the market for its products, and other risks that are described in ClearSign's public periodic filings with the SEC, including the discussion in the risk factors section of the 2021 annual report on Form 10-K. Except as required by law, ClearSign assumes no responsibility to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so. So on the call with me today are Jim Deller, ClearSign's President and Chief Executive Officer, and Brent Hines, ClearSign's vice president of finance and controller. So at this point, I would like to turn the call over to Brent Hines. Please go ahead, Brent. Thank you, Matthew. And thank you, everyone, for joining us here today.

Before I begin, I would like to note that our 2021 annual report on Form 10-K was filed with the SEC last week, which includes our financial results for the year into December 31st, 2021. As noted on the last call, my initial focus in joining ClearSign was to continue to enhance and strengthen the financial reporting systems and to lay the groundwork for future growth. I'm happy to report that we have successfully remediated the material weakness reported in Q2 2021. We achieved this goal by focusing on the fundamentals, reconciliations, and checklists. We have also built system-wide infrastructure to facilitate efficient and effective operations month to month. Moving forward, our muscle memory will only improve our efficiency and scalability. I must say thank you to the accounting team and the whole ClearSign family for pulling together to overcome this challenge. And with that, I would like to give an overview of the financials for the fourth quarter and full year 2021. The company recognized $607,000 of revenue during the 12 months ended December 31st, 2021. The company reported zero revenues for the same period in 2020. Our operating expenses for the year ended December 31, 2021, increased approximately $1 million, compared to the same period in 2020. The majority of this $1 million increase can be attributed to two key items. One item was our ExxonMobil project, where we incurred approximately $712,000 in year-over-year expenses to further develop and refine our ClearSign core burners. The second item relates to a non-cash patent impairment charge of approximately $385,000. Our impairment charges were the result of periodic reviews of our patent portfolio. Over the past year, these reviews have focused on aligning product lines with key patents and right-sizing our spin profile to better focus our dollars strategically. Our net cash used in operations for the year ended December 31, 2021, was approximately $6.7 million, compared to $6 million for the same period in 2020. The $700,000 year-over-year difference was attributable to our ExxonMobil project, which I discussed earlier. At December 31, 2021, our cash balance totaled $7.6 million, compared to $8.8 million for the same period in 2020. We funded working capital in 2021 by issuing common stock. The company issued common stock pursuant to a at-the-market offering sales agreement, or ATM agreement. The company entered into this ATM agreement in December 2020 with Virtue America's LLC as the sales agent. Per the agreement, Virtue made sales shares of common stock with an aggregate offering price of up to $15 million. As of December 31st, 2021, the company issued approximately 1,093,000 shares of common stock under the ATM program at an average price of $5.03 per share. Gross proceeds totaled approximately 5.5 million, and net cash proceeds were approximately 5.3 million. Subsequent to year end, we issued an additional 500,000 shares at an average price of $1.25 per share. Gross proceeds were $624,000 and net proceeds were $611,000. We issued these additional shares subsequent to year-end as a proactive measure to avoid a going concern. In doing this, our primary objective was to maintain a healthy balance sheet as we develop our customer relationships and pursue sales with major international customers. The monies raised were limited and strategic as we wanted to be judicious in this current market. The total shares outstanding as of March 29, 2022, were $32,150,966. We have confidence in our financial position and balance sheet. And with our year-ending balances and our current plans, we have sufficient working capital available to continue operating our business at current levels well into 2023, and that is without revenue from any other sources. With that, I'd like to turn the call over to Jim Deller. Jim?